Stellantis says partnership with Foxconn will help bring chip supply stability

PARIS -- Stellantis and Foxconn have signed a memorandum of understanding to co-design a family of dedicated microcontrollers that will eventually cover 80 percent of Stellantis’ needs, the companies said.

The partnership is especially critical as automakers grapple with a persistent shortage of semiconductors that control almost every function in today’s highly advanced cars. 

The shortfall has cost automakers millions of vehicles in lost production, led to automakers prioritizing some models at the expanse of others, and even building cars without certain options. It is not expected to ease until 2022.

The tie-up "will help drive stability in Stellantis’ global semiconductor supply chain," the automaker said in a news release on Tuesday as it presented its new software strategy.

The companies did not divulge financial terms of the deal.

As part of that strategy, Stellantis will develop three technological platforms, including STLA Brain for electrics/electronics and software, that it will deploy on four new EV platforms. 

There will be four families of microcontrollers that will cover more than 80 percent of Stellantis’ semiconductor requirements, starting in 2024, CEO Carlos Tavares said in the news release, "helping to significantly modernize our components, reduce complexity, and simplify the supply chain. 

"This will also boost our ability to innovate faster and build products and services at a rapid pace," he added. 

In addition to being used on the STLA Brain technological platform, the semiconductors from the partnership "will be utilized within the Foxconn EV ecosystem," the news release said.

Foxconn, best known as Apple’s iPhone production partner, is becoming increasingly involved in EV development and production over the past year, seeing the rising interest in the category as a potent growth driver.

The nonbinding memorandum of understanding on semiconductors is Foxconn’s second partnership with Stellantis. In May, the companies announced the Mobile Drive joint venture to develop “smart cockpits,” human-machine intefaces (HMI) and services.

Mobile Drive is expected to be finalized by the end of the year, Stellantis said Tuesday.